Business process outsourcing can dramatically change the way we interact with customers and allow us to reach out into the marketplace with a more powerful value proposition. Implemented correctly, BPO is about letting others take care of non core activities, the things that are essential to your company, but possibly things that you are not very good at. Outsourcing these functions to specialist service providers or freelances means that your business, no matter what size it is, is freed up to focus on what you are good at doing.

Outsourcing is no longer the "bolt on" for the big corporation. Indeed, it is now possible for smaller companies to compete with their perceived untouchable competition by adopting a flexible BPO strategy. In some cases, smaller companies can out perform bigger competitors because of their agility and the speed of which they can adopt newer, better or more cost effective ways of doing business.

A good example would be my company, which is growing to become the largest of its type in the world. How ? Well, from the ground up we adopted the BPO model. Absolutely all non core activities are outsourced to quality service partners, meaning the core team get to work on the meaty interesting strategic stuff. Of course, there can be pitfalls. Your perceived value proposition is only as strong as the partners you choose. And because they can be such an integral part of your business, if they let you down, they let your customer down and this has happened to us a few times.

How do you avoid this ? Well one way is careful due diligence of your partners. Having said that, one of our partners is a global brand and their consistent failure cost us millions and almost destroyed our business. What we do now is spread that risk and allow service providers to compete on both price and quality. It keeps them alive and on their toes.

There are also dangers of dealing with smaller unknown service providers, but this can be mitigated with careful reference checking and using authenticated escrow services to ensure that you only pay for agreed deliverables. Both Elance and offer this service and it is wise to take it.

Back to the BPO model, which has allowed us to grow and reach into global markets. Our most recent service provision is a global call centre that allows customers from any country to call in at any time and talk to a human. Merge this with our recently implemented enterprise wide CRM system, hosted online so as to be usable from anywhere, and it is possible for us to compete with anyone for a very, very small cost.

The service partners we choose offer highly scaleable products and services, so we only pay for what we use as it is used. This means virtually a zero cost base with unlimited resource which is only a cost when some one uses it, and that cost is very small.

In my next article I will talk about how to merge services including call centres, CRM, VOIP and shipping into a powerful supply chain that will enable your business like nothing else.

For now consider this. In the contemporary business world it is not products, services or companies that compete, it is complete supply chains. I will show you how to make your customers part of your supply chain, creating lock in for them, and lock out for competition.